Understanding how and to what extent economic growth translates into better lives for people is important to both citizens and policy makers. A crucial step in answering these questions is having the right tools to assess people’s living conditions. While gross domestic product (GDP) has for a long time been the most used proxy for measuring well-being, it fails to account for the actual quality of life experienced by people. The growth of GDP per capita does not always translate into better life for people. Household income and GDP per capita in OECD regions, for example, are on average positively correlated, but the same trend is not followed everywhere.

The disposable income measures the capacity of households (or individuals) to provide themselves with consumable goods or services. As such, it is a better indicator of the material well-being of citizens than gross domestic product (GDP) per inhabitant. Regions where net commuter flows are high may display a very high GDP per capita which does not translate into a correspondingly high income for their inhabitants.

Quantity of housing and its affordability are essential for households to meet the basic need for shelter, personal space, and financial security. The number of rooms per person is a standard measure of whether people are living in crowded conditions; across OECD regions this number varies widely, from half a room in Eastern Anatolia (Turkey) to three in Vermont (United States), a difference almost twice as large as that observed across OECD countries. In 2013, regional differences in the number of rooms per person were the widest in Canada, the United States, Spain and Turkey (). The indicator on the number of rooms per person has, however, some limitations, which may hamper regional and international comparisons. First, it does not take into account the possible trade-off between the number of rooms in the dwelling and its location: some households may choose to live in smaller dwellings located in better serviced areas than in larger homes in less desirable locations. Second, it does not take into account the overall size of accommodation, which is generally smaller in urban areas than in rural areas.

Unemployment has soared in OECD countries in the years after the economic crisis and, although it partially recovered, the unemployment rate in 2014 was 7.3 in the OECD area, still 1.7 points higher than in 2007. In 2014, the difference in unemployment rates among all OECD regions was above 30 percentage points, almost 10 percentage points higher than the difference in unemployment among OECD countries. The largest regional disparities in unemployment rates were found in Turkey, Spain, Italy and Belgium ().

Educational outcomes are some of the most influential determinants of current and future well-being. Evidence shows that highly educated individuals are more likely to have better health and higher earnings than the less well educated. From an aggregate perspective, a well-educated workforce is also crucial for raising productivity, ensuring resiliency and adaptability to the changing needs of the labour market but also for making use of innovation. Both the capacity to generate and absorb innovation are affected by the quality of the human capital, which in turn is often enhanced by the education levels of the workforce.

Access to services affects how people obtain what is necessary to satisfy their needs and wants. The first indicator used to measure access to services is the share of households with a broadband connection, which is available for all OECD regions. A broadband connection is an important requirement for having access to information and to other services that shape people’s quality of life and affect their opportunities to prosper.

Being in good health is an important determinant of quality of life and also contributes to other well-being dimensions, such as being able to pursue education, have a job, and participate in the activities that people value. In 55% of OECD regions life expectancy at birth, a common measure of health outcomes, now exceeds 80 years. The lowest levels of life expectancy, below 75 years, are found in 30 regions. The difference in life expectancy among OECD countries is 8 years (between Japan and Mexico). Within countries, it is 11 years between British Columbia and Nunavut in Canada, and 6 years between the Capital Territory and the Northern Territory in Australia, or Hawaii and Mississipi in the United States ().

Personal safety is a critical dimension of regional well-being. Crime in fact has not only a direct impact on the victims and their families, but also on those who are not victims but live in the same community, as shown by the increasing feelings of insecurity and low trust in the capacity of national and local institutions to handle the safety issue (OECD, 2015). Safety is often connected with other well-being outcomes such as education, health and jobs. Consequently, policies pursuing better safety often build on the complementarities with the other dimensions (OECD, 2014).

Air pollution at the national and local level is an important determinant of the individual well-being in regions and cities in particular due to its negative impact on health and the economy.

Well-functioning democracies require people to engage and participate in the different aspects and activities of public life. Through engagement and participation individuals influence and determine the political choices that impact everyone’s lives and well-being. Civic engagement and participation are necessary conditions for effective governance, while, at the same time, good quality of governance, through different institutional settings, can enhance citizens’ participation.

Subjective well-being reflects the notion of measuring how people experience and evaluate their lives. It includes evaluation of life as a whole (generally referred as life satisfaction), evaluations of particular domains of life (for example, satisfaction with time available for leisure), feelings and emotions, as well as measures of meaningfulness or purpose in life. People’s evaluations of different domains and their expectations are useful information to guide policy making.